Monday, July 04, 2011
Nearly 90% of the wealth generated in the post-recession U.S. economy has gone to corporations, while American workers received a tiny fraction of the money.
A new study from Northeastern University in Boston found “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of growth since the recovery began in 2009.
Economists who worked on the report said it was “unprecedented” for American labor to take home so little of the national income growth during a recovery.
In terms of actual dollars, pretax corporate profits amounted to $464 billion out of the $528 billion in national income generated from the second quarter of 2009 through the fourth quarter of 2010. The amount that went to wages and salaries was only $7 billion, after accounting for inflation.
The share of income growth that workers received was the smallest of any economic recovery taking place over the last three decades.
There are different ways of measuring income growth, but none of them paint a better picture for workers. The Bureau of Labor Statistics reported that average real hourly earnings for all employees actually declined by 1.1% from June 2009 to May 2011.
-Noel Brinkerhoff
The Wageless, Profitable Recovery (by Steven Greenhouse, New York Times)
The “Jobless and Wageless” Recovery from the Great Recession of 2007-2009 (Center for Labor Market Studies at Northeastern University) (pdf)
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